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19 July 2011 early edition/transcript/Part 5
Part 5 JOHN WHITTINGDALE: Before I bring in my next colleague can I just come back to something Thérèse Coffey raised, which was the closure of the News of the World? Is it your intention to launch a new Sunday tabloid newspaper? JAMES MURDOCH: No, there are no— RUPERT MURDOCH: We have made no decision on that. JAMES: There's no decision on that. WHITTINGDALE: So for the moment there are no plans to have a News International title coming out on Sunday at the tabloid end of the market? JAMES: There are no immediate plans for that. RUPERT: But no guarantee that we won't. WHITTINGDALE: Fine. You have talked in the past about moving to seven-day newsrooms. There was speculation that the title "The Sun on Sunday" had been reserved— JAMES: I think we leave all those options open. That is not the company's priority now. In the last week it has come up in the company but my father's direction and my direction is that this is not the time to be worrying about that. The company has to move forward on all of these other actions and get to grips with the facts of these allegations and understand them as fully as we can. WHITTINGDALE: Can I appeal both to the witnesses and, indeed, to Members to try to keep brief because we still have quite a lot to get through? ADRIAN SANDERS: Good afternoon. This is to Mister James Murdoch: in your statement of 7 July 2011 you said, "The Company paid out-of-court settlements approved by me… I did not have a complete picture when I did so." What do you know now that you did not know then? JAMES: Essentially the new information that emerged that is critical here is the information that came out of the ongoing process of civil litigations in 2010; and at the end of 2010 the presentation of evidence, which had not been in our possession previously from this civil litigation, widened the circle definitively, or at least made it very apparent that it is very likely that the circle was wider than the two individuals, Mr Goodman and Mr Mulcaire, from previously. It was that information that was really critical. If I can go back to my previous testimony just earlier today around the settlement with Mr Taylor, the commercial and legal rationality will around that settlement was very, very clear. The underlying fact was not in dispute. It was a known fact from a previous trial. The advice was very, very clear as to what sort of damages could be expected to be paid and it was quite clear and quite likely that if litigated, the company would lose that case. In the context of none of this other information—this is a full year before some of the new allegations in the press arose from afar, so there was no reason to believe at the time that it was anything other than in the past. Now knowing then what I know now, would I have still directed to negotiate to settle that case? I would, actually, but I would have coupled it with the other actions that we have taken since the new evidence emerged at the end of September 2010. And that is to immediately go and look at whatever we can find internally around the individuals involved; to immediately contact the police about information that may be of great interest to them; to put in place the process, which took up a little while and we did it in the early part of 2011, around admitting liability to the civil litigants; putting a process in place to get to the bottom of what legitimate allegations there were; apologising unreservedly to the victims of those illegal voicemail intercepts, which were absolutely inexcusable; and having a system of compensation there. So if I knew then what we know now and with the benefit of hindsight we can look at all these things, but if I knew then what we know now we would have taken more action around that and moved faster to get to the bottom of these allegations. Q256 SANDERS: Were the settlements paid by News International, by News Corp or by News Group Newspapers? JAMES: I do not recall. I would imagine it was either News International or News Group Newspapers. I think it was News Group Newspapers, but I am sure we can provide you with that information. Q257 SANDERS: What advice did Tom Crone and Colin Myler give you on the payment to Gordon Taylor? JAMES: The advice from Mr Myler and Mr Crone was as I have described it. The underlying fact of the case was known because it had come up in the trial of Mr Mulcaire. Q258 SANDERS: Were you aware that the case involved the criminal act of phone hacking? JAMES: That was my understanding. The litigation was for damages for the illegal voice mail interceptions. Q259 SANDERS: When did you get that advice? JAMES: In the first half of 2008. Q260 SANDERS: In 2009, Mr Crone and Mr Myler informed us that they decided to settle Mr Taylor's claim on the advice of the company's external legal advisers. Was that advice from Farrer & Co. solicitors? JAMES: Farrer & Co. has done work for us. I do not know precisely which external counsel Mr Crone and Mr Myler engaged on that, but I can clarify it. Q261 SANDERS: Did you see the advice, whether it was from Farrer & Co. or anyone else? JAMES: No. I received the advice orally from Mr Myler and Mr Crone. Q262 SANDERS: What was their advice? JAMES: It was as I described it. Q263 SANDERS: Simply to settle? JAMES: And that outside legal advice had been taken on the expected quantum of damages. Their advice was that the case would be lost and that, in the absence of any new evidence—I was certainly not made aware of any new evidence—it was simply a matter related to events that came to light in 2007 and in the criminal trials before I was there. It was a matter in the past. The police had also closed their case and said that there was no new evidence, so the context is of a case based on events that were a year old or more and on underlying activities prior to that. That is where we were. Q264 SANDERS: Was part of the advice that a high payment would ensure the matter was kept confidential? JAMES: No, not at all. Out-of-court settlements are normally confidential. I do not know of many out-of-court settlements that are not kept confidential, although I am sure there are some. There was nothing about confidentiality. I think I understand where you are going with this, Mr Sanders, but, no, the amount paid rested on advice from outside counsel on the amount we would be expected to pay in damages, plus expenses and litigation costs. Q265 SANDERS: Did you question why such high payments were made to Mr Taylor and Mr Clifford? It has been suggested that the figures were £700,000 and £1 million respectively for invasions of privacy, but the record privacy damages awarded by a court remains £60,000, ironically against News of the World. JAMES: I did question the amount, but not in relation to the £60,000. If you recall the chronology, and I am sure you do, the £60,000 award against News of the World, which I believe was the Mosley case, came after we sought advice from senior, distinguished outside counsel on the quantum of damages that we could be expected to pay to Mr Taylor and Mr Clifford. Their advice was that the damages could be £250,000 plus expenses and litigation costs, which were expected to be between £500,000 and £1 million. That is my recollection of it. The chronology is important, because afterwards we obviously would have had different information, but it was not afterwards, it was before. Q266 SANDERS: You have since said that when you approved the Taylor settlement, you did not have all the facts. What do you know now that you did not know then? JAMES: As I have testified, the key facts and evidence came to light at the end of 2010 as the lengthy due process on the civil litigations on the matters took its course. It was that process that unearthed the key evidence. It was really only after that that the police said that they should restart the investigation. As soon as we had that new information, at the end of 2010, which indicated to us that there was a wider involvement, we acted on it immediately. Q267 SANDERS: Tom Crone said last week he did not know why he left News Group Newspapers. Can you clarify why he was asked to leave after 26 years of service? JAMES: Last week—two weeks ago, I guess—the News of the World published its last paper. Mr Crone was very involved with News of the World matters over the years. The company believed and the management of the company believed that it was time to part ways. I was not involved in those direct discussions with Mr Crone, and I cannot comment on their nature or their content; I do not have knowledge of them. Q268 SANDERS: The New Statesman carried a story last week that News International subsidised Andy Coulson's wages after he left your employ. Can you shed any light on that? JAMES: I have no knowledge of Andy Coulson's wages after he left the company's employment. Q269 SANDERS: Finally, are you familiar with the term "wilful blindness"? JAMES: Mr Sanders, would you care to elaborate? Q270 SANDERS: It is a term that came up in the Enron scandal. Wilful blindness is a legal term. It states that if there is knowledge that you could have had and should have had, but chose not to have, you are still responsible. JAMES: Mr Sanders, do you have a question? Respectfully, I just do not know what you would like me to say. Q271 SANDERS: The question was whether you were aware— JAMES: I am not aware of that particular phrase. Q272 SANDERS: But now you are familiar with the term, because I have explained it to you. JAMES: Thank you, Mr Sanders. RUPERT: I have heard the phrase before, and we were not ever guilty of that.